Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 09, 2019 | |
Document and Entity Information: | ||
Entity Registrant Name | POWERVERDE, INC. | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0000933972 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 31,750,106 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-27866 | |
Entity Incorporation, State or Country Code | NV | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 116,529 | $ 8,482 |
Accounts receivable | 6,000 | 10,000 |
Prepaid expenses and other current assets | 8,543 | 10,866 |
Total Current Assets | 131,072 | 29,348 |
Property and Equipment | ||
Property and equipment, net of accumulated depreciation of $107,641 and $107,007, respectively | 0 | 634 |
Other Assets | ||
License, net of accumulated amortization of $25,822 | 0 | 74,178 |
Total Other Assets | 69,178 | 74,178 |
Total Assets | 131,072 | 104,160 |
Current Liabilities | ||
Accounts payable and accrued expenses | 43,043 | 39,136 |
Total Current Liabilities | 43,043 | 39,136 |
Long Term Liabilities | ||
Convertible note payable | 278,996 | 0 |
Total Long Term Liabilities | 278,996 | 0 |
Total Liabilities | 322,039 | 39,136 |
Stockholders' (Deficit) Equity | ||
Preferred stock: 50,000,000 preferred shares authorized, 0 preferred shares issued at June 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 40,300,106 common shares issued and 31,750,106 shares outstanding at June 30, 2019 and December 31, 2018 | 3,981 | 3,981 |
Additional paid-in capital | 12,609,980 | 12,609,980 |
Treasury stock, 8,550,000 shares at cost | (491,139) | (491,139) |
Accumulated deficit | (12,313,789) | (12,057,798) |
Total Stockholders (Deficit) Equity | (190,967) | 65,024 |
Total Liabilities and Stockholders' (Deficit) Equity | $ 131,072 | $ 104,160 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Property and equipment, net of accumulated depreciation | $ 107,641 | $ 107,007 |
License, net of accumulated amortization | $ 0 | $ 25,822 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 40,300,106 | 40,300,106 |
Common Stock, shares outstanding | 31,750,106 | 31,750,106 |
Treasury stock | 8,550,000 | 8,550,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues [Abstract] | ||||
Revenue | $ 1,000 | $ 3,000 | $ 6,000 | $ 165,094 |
Operating Expenses | ||||
Research and development | 34,621 | 489,421 | 69,680 | 524,713 |
General and administrative | 48,590 | 63,927 | 109,389 | 134,321 |
Total Operating Expenses | 83,211 | 553,348 | 179,069 | 659,034 |
Loss from Operations | (82,211) | (550,348) | (173,069) | (493,940) |
Other Income (Expenses) | ||||
Interest income | 0 | 706 | 0 | 1,621 |
Loss on impairment | (69,178) | 0 | (69,178) | 0 |
Interest expense | (9,451) | 0 | (13,744) | (699) |
Total Other Income (Expense) | (78,629) | 706 | (82,922) | 922 |
Loss before Income Taxes | (160,840) | (549,642) | (255,991) | (493,018) |
Provision for Income Taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (160,840) | $ (549,642) | $ (255,991) | $ (493,018) |
Net Loss per Share - Basic and Diluted | $ (0.005) | $ (0.02) | $ (0.01) | $ (0.02) |
Weighted Average Common Shares Outstanding - Basic and Diluted | 31,750,106 | 31,750,106 | 31,750,106 | 31,750,106 |
Condensed Consolidated Changes
Condensed Consolidated Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Dec. 31, 2017 | $ 3,981 | $ 12,129,331 | $ (11,378,720) | $ (491,139) | $ 263,453 | |
Stock based compensation | 444,800 | 444,800 | ||||
Net loss | (493,018) | (493,018) | ||||
Balance at Jun. 30, 2018 | 3,981 | 12,574,131 | (11,871,738) | (491,139) | 215,235 | |
Balance at Mar. 31, 2018 | 3,981 | 12,129,331 | (11,322,096) | (491,139) | 320,077 | |
Stock based compensation | 444,800 | 444,800 | ||||
Net loss | (549,642) | (549,642) | ||||
Balance at Jun. 30, 2018 | 3,981 | 12,574,131 | (11,871,738) | (491,139) | 215,235 | |
Balance at Dec. 31, 2018 | 3,981 | 12,609,980 | (12,057,798) | (491,139) | 65,024 | |
Stock based compensation | 0 | |||||
Net loss | (255,991) | (255,991) | ||||
Balance at Jun. 30, 2019 | 3,981 | 12,609,980 | (12,313,789) | (491,139) | (190,967) | |
Balance at Mar. 31, 2019 | 3,981 | 12,609,980 | (12,152,949) | (491,139) | (30,127) | |
Net loss | (160,840) | (160,840) | ||||
Balance at Jun. 30, 2019 | $ 3,981 | $ 12,609,980 | $ (12,313,789) | $ (491,139) | $ (190,967) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net (Loss) income | $ (255,991) | $ (493,018) |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | ||
Impairment of intangible assets | 69,178 | 0 |
Depreciation and amortization | 5,633 | 13,574 |
Amortization of debt issuance costs | 2,997 | 0 |
Stock based compensation | 0 | 444,800 |
Changes in operating assets and liabilities: | ||
Accounts receivable, prepaid expenses and other assets | 6,324 | 368,160 |
Accounts payable and accrued expenses | 3,906 | (89,992) |
Liberty notes receivable | 0 | 34,000 |
Cash (Used) Provided by Operating Activities | (167,953) | 277,524 |
Cash Flows from Financing Activities | ||
Proceeds from notes payable, related party | 300,000 | 0 |
Payments for debt issuance costs | (24,000) | 0 |
Payment on notes payable, related party | 0 | (150,000) |
Cash provided by (used in) Financing Activities | 276,000 | (150,000) |
Net Change in Cash and Cash Equivalents | 108,047 | 127,524 |
Cash and cash equivalents at Beginning of Period | 8,482 | 1,336 |
Cash and cash equivalents at End of Period | 116,529 | 128,860 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest | $ 10,747 | $ 699 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2019 | |
Financial Statements | |
Condensed Consolidated Financial Statements | Note 1 – Condensed Consolidated Financial Statements The accompanying unaudited condensed consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Annual Report of PowerVerde, Inc. (“PowerVerde,” “we,” “us,” “our,” or the “Company”) as of and for the year ended December 31, 2018. The results of operations for the six months ended June 30, 2019, are not necessarily indicative of the results to be expected for the full year or for future periods. The condensed consolidated financial statements include the accounts of PowerVerde, Inc., formerly known as Vyrex Corporation (the “Company”), and PowerVerde Systems, Inc., formerly known as PowerVerde, Inc., its wholly-owned subsidiary. Intercompany balances and transactions have been eliminated in consolidation |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2019 | |
Going Concern: | |
Going Concern | Note 2 – Going Concern We have financed our operations since inception through the sale of debt and equity securities and through Biotech IP licensing revenues which expired March 2018. As of June 30, 2019, we had working capital of $88,029 compared to a working capital deficit of $9,788 at December 31, 2018. This improvement in working capital is due primarily to the sale of related party notes payable during this period. The Company has historically relied upon unrelated and related party debt and equity financing to fund its cash flow shortages and will require either additional debt or equity financing to sustain its operations. The Company’s revenues through 2018 were derived mainly from royalties under its Biotech licensing agreement, which expired in March 2018. Those factors create substantial doubt about the Company’s ability to continue as a going concern. The Company continues to seek funding from private debt and equity investors, as it needs to promptly raise substantial additional capital in order to finance its plan of operations. There can be no assurance that the Company will be able to promptly raise the necessary funds on commercially acceptable terms, if at all. If the Company does not raise the necessary funds, it may be forced to cease operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Policy Text Block [Abstract] | |
Summary of Significant Accounting Policies | Note 3 – Summary of Significant Accounting Policies Nature of Business The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations were recognized as revenue through March 2018, when the underlying license agreement terminated. No revenues from this planned principal operation have been generated. Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable consist of balances due from assembly services. The Company monitors accounts receivable and provides allowances when considered necessary. At June 30, 2019 and December 31, 2018, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided. Revenue Recognition Royalties are recognized as earned in the period the sales to which the royalties relate occur. Manufacturing assembly services are recognized as revenue when the assembled product is delivered to the customer. Revenues recognized under these agreements amount to 100% of total revenues for the three and six months ended June 30, 2019 and 2018. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred. Impairment of Long-Lived Assets Impairment losses are recorded on long-lived assets (property, equipment and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses were recognized during the three and six months ended June 30, 2018. For the three and six months ended June 30, 2019, the Company recognized an impairment loss of $69,178. Stock-based Compensation The Company has accounted for stock-based compensation under the provisions of Accounting Standards Codification (ASC) Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815-40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2018 and June 30, 2019 were classified as equity. Accounting for Uncertainty in Income Taxes The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There is no uncertain tax positions as of June 30, 2019 and December 30, 2018. Research and Development Costs The Company’s research and development costs are expensed in the period in which they are incurred. Earnings (Loss) Per Share Earnings (loss) per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 975,000 Financial instruments The Company carries cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable, at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2019 | |
Recent Accounting Prouncements | |
Recent Accounting Pronouncements | Note 4 – Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”). Topic 606 supersedes the revenue recognition requirements in ASU Topic 605, Revenue Recognition (“Topic 605”), and requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, Other Assets and Deferred Costs- Contracts with Customers We have reviewed each of our current contracts for the related performance obligations and related revenue and expense recognition implications. A performance obligation under the new revenue standard is defined as a promise to provide a “distinct” good or service to a customer. The Company has determined that the assembly services is a performance obligation for which a transaction price has been established in the manufacturing agreement. The assembly of each unit stands on its own. Revenue related to assembly services is recognized as revenue when the assembled product is delivered to the customer. The Company has also determined that the performance obligation associated with our royalty revenues is the ongoing delivery of the license to which the royalties relate. Royalty revenues are recognized based on the contract royalty rate applied to licensee sales in the periods during which such sales occurred. In February 2016, the FASB issued ASU 2016-02, “ Leases,” In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718).” |
Intellectual Property and Licen
Intellectual Property and License Agreement | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Intellectual Property and License Agreement | Note 5 – Intellectual Property and License Agreement On June 1, 2016, the Company entered into a ten-year License Agreement with Helidyne LLC for total consideration of $100,000 to utilize the Helidyne intellectual property in the manufacturing of planetary rotor expanders and the incorporation of same in the Company’s distributed electric power generation systems. The license agreement also grants the Company an exclusive license to sell the expanders whether manufactured by Helidyne or by the Company. The Company’s royalty obligation begins on the earlier of the commercialization of the product or three years from the effective date of the agreement. Once the royalty obligation begins, the minimum annual royalty is $50,000 for each of the first six years, and $100,000, per commercial year, for the remainder of the agreement. Helidyne has defaulted under the agreement. Royalties would be payable only if Helidyne performs as required, or if the Company elects to produce its own expanders using Helidyne technology. During the quarter ended June 30, 2019, management of the Company evaluated the continued default by Helidyne and determined that Helidyne will not be able to perform under the license agreement for the foreseeable future. The Company’s license agreement continues to be active and the Company may utilize the Helidyne intellectual property in marketing its own products. Under the terms of the license agreement, the Company has the right to develop a prototype utilizing the Helidyne technology at its own cost. Due to the continued default by Helidyne and the potential cost of developing its own prototype, the Company has determined that the intangible asset related to the above license agreement is impaired and recognized an impairment charge of $69,178, which is 100% of the net carrying value. See Note 9. For the six months ended June 30, 2019 and 2018, amortization expense was $7,374, and accumulated amortization of the intangible assets was $25,822 at December 31, 2018. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Warrants Abstract | |
Warrants | Note 6 – Warrants A summary of warrants issued, exercised and expired during the six months ended June 30, 2019 is as follows: Shares Weighted Average Exercise Price Aggregate Intrinsic Balance at December 31, 2018 975,000 $ .11 $ — Issued — — — Expired — — — Converted to Common Stock Options — — — Balance at June 30, 2019 975,000 $ .11 $ — |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2019 | |
Stock Options | |
Stock Options | Note 7 – Stock Options Stock option activity for the six months ended June 30, 2019, is summarized as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2018 11,180,500 $ 0.20 7.02 Granted — — — Expired/forfeited — — — Options outstanding at June 30, 2019 11,180,500 $ 0.20 6.52 Total stock option compensation for the six months ended June 30, 2019 and 2018 was $0 and $444,800 respectively. There is no unrecognized compensation expense associated with the options. |
Convertible Notes Payable to Re
Convertible Notes Payable to Related Parties | 6 Months Ended |
Jun. 30, 2019 | |
Notes Payable to Related Parties | |
Convertible Notes Payable to Related Parties | Note 8 - Convertible Notes Payable to Related Parties In the first quarter of 2019, the Company issued Convertible Promissory Notes totaling $290,000 to stockholders. The notes are to be paid in one principal payment, along with any unpaid interest by December 31, 2021. Interest is payable semiannually at 10%. The notes are convertible into common stock at a price of $.20 per share through December 31, 2019, $.30 per share from January 1, 2020 through December 31, 2020, and $.40 per share from January 1, 2021 through the maturity date of December 31, 2021. In May 2019, the Company issued a Convertible Promissory Note in the principal amount of $10,000 to a stockholder in connection with a loan in the same amount. Consequently, Convertible Promissory Notes have been issued in an aggregate principal amount of $300,000 during the first two quarters of 2019. Long-term debt at June 30, 2019 consisted of the following: 2019 Note payable to stockholders $ 300,000 Less: Unamortized debt issuance costs 21,004 Total long-term debt $ 278,996 Amortization of the debt issuance costs is reported as interest expense in the income statement. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitment and Contingencies: | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies On June 25, 2015, Company consultant Hank Leibowitz assigned to the Company a patent he obtained for a system and method for using high temperature sources in Rankine cycle power systems. The Company has agreed to pay Mr. Leibowitz a 2% royalty for any and all revenues of products and/or project sales by the Company based on the subject patent. On June 1, 2016, the Company entered into a ten-year License Agreement with Helidyne LLC to utilize the Helidyne intellectual property in order to use Helidyne expanders in Powerverde systems and to sell Helidyne expanders. As part of the licensing agreement the Company committed to purchase two 50 kW expanders, at a price of $25,000 each, on or before the sixth month anniversary of the agreement. The $50,000 was payable in two monthly installments of $25,000 beginning October 2016. The Company had made payments totaling $38,750, towards the purchase of the expanders, all of which was included in prepaid expense and other current assets in the consolidated balance sheets at December 31, 2016. Due to Helidyne’s failure to perform under the agreement, the Company has not made any further payments to Helidyne and does not intend to do so unless and until Helidyne performs as required. Helidyne has not objected to the Company’s position, and it is very unlikely that Helidyne will ever be able to perform. The Company agreed to pay Helidyne LLC a royalty of 3% of sales, subject to a minimum annual royalty of $50,000 beginning on the earlier of commercialization of the product or three years from the effective date of the agreement. This minimum royalty would be payable only if Helidyne performs as required, which is very unlikely, or if the Company elects to produce its own expanders using Helidyne technology. The Company does intend to produce these expanders directly or through a contract manufacturer in the future. See Note 5. On April 15, 2017, the Company entered into an assembly agreement with Liberty Plugins, Inc. (“Liberty”) to assemble Liberty’s Hydra electronic vehicle charging systems and ship completed Hydras to Liberty’s facility in Santa Barbara, California (the “Liberty Agreement”). Liberty has agreed to pay $1,000 for the first 10 Hydras assembled in a month, $750 per Hydra for the next 10 Hydras assembled per month and $500 per Hydra for each Hydra assembled above 20 per month. The Company has never assembled/shipped more than 10 Hydras in any month and does not expect to do so in the future. As of June 30, 2019, the Company has built and shipped 40 Hydras. Revenue for these products is reflected in the net revenue on the Company’s condensed consolidated statement of operations as follows: $6,000 for the six months ended June 30, 2019 and 2018, respectively and $3,000 and $1,000 for the three months ended June 30, 2019 and 2018, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions | |
Related Party Transactions | Note 10 - Related Party Transactions Since July 2010, the accounting firm J.L. Hofmann & Associates, P.A. (“JLHPA”), whose principal is our CFO John L. Hofmann, has provided financial consulting and accounting services to the Company. In December 2017, J.L. Hofmann & Associates, P.A. merged with Kabat, Schertzer, De La Torre, Taraboulos & Co, LLC (“KSDT”). The Company paid $18,913 and $18,330 for its services in the six months ended June 30, 2019 and 2018, respectively and $9,300 and $7,600 in the three months ended June 30, 2019 and 2018, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 – Subsequent Events The Company’s management evaluated subsequent events through August 9, 2019, in connection with the preparation of these condensed consolidated financial statements, which is the date these financial statements were available to be issued. There are no subsequent events to report as of this date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Policy Text Block [Abstract] | |
Nature of Business | Nature of Business The Company is devoting substantially all of its present efforts to establish a new business involving the development and commercialization of clean energy electric power generation systems, and none of its planned principal operations have commenced. However, royalties from licenses unrelated to planned principal operations were recognized as revenue through March 2018, when the underlying license agreement terminated. No revenues from this planned principal operation have been generated. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts Receivables | Accounts Receivable Accounts receivable consist of balances due from assembly services. The Company monitors accounts receivable and provides allowances when considered necessary. At June 30, 2019 and December 31, 2018, accounts receivable were considered to be fully collectible. Accordingly, no allowance for doubtful accounts was provided. |
Revenue Recognition | Revenue Recognition Royalties are recognized as earned in the period the sales to which the royalties relate occur. Manufacturing assembly services are recognized as revenue when the assembled product is delivered to the customer. Revenues recognized under these agreements amount to 100% of total revenues for the three and six months ended June 30, 2019 and 2018. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Expenditures for major betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Impairment losses are recorded on long-lived assets (property, equipment and intellectual property) used in operations when impairment indicators are present and the undiscounted expected cash flows estimated to be generated by those assets are less than the carrying value of such assets. No impairment losses were recognized during the three and six months ended June 30, 2018. For the three and six months ended June 30, 2019, the Company recognized an impairment loss of $69,178. |
Stock-based Compensation | Stock-based Compensation The Company has accounted for stock-based compensation under the provisions of Accounting Standards Codification (ASC) Topic 718 – “Stock Compensation” which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (stock options and common stock purchase warrants). The fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term, and the risk-free interest rate. Expected volatilities are based on historical volatility of peer companies and other factors estimated over the expected term of the stock options. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company accounts for common stock purchase warrants in accordance with ASC Topic 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity” (“ASC 815-40”). Based on the provisions of ASC 815-40, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement, or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company, or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All outstanding warrants as of December 31, 2018 and June 30, 2019 were classified as equity. |
Accounting for Uncertainty in Income Taxes | Accounting for Uncertainty in Income Taxes The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There is no uncertain tax positions as of June 30, 2019 and December 30, 2018. |
Research and Development Costs | Research and Development Costs The Company’s research and development costs are expensed in the period in which they are incurred. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings (loss) per share is computed in accordance with FASB ASC Topic 260, “Earnings per Share”. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period. Certain common stock equivalents were not included in the earnings (loss) per share calculation as their effect would be anti-dilutive. Warrants exercisable for 975,000 |
Financial instruments | Financial instruments The Company carries cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable, at historical costs. The respective estimated fair values of these assets and liabilities approximate carrying values due to their current nature. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Warrants Abstract | |
Summary of warrants | A summary of warrants issued, exercised and expired during the six months ended June 30, 2019 is as follows: Shares Weighted Average Exercise Price Aggregate Intrinsic Balance at December 31, 2018 975,000 $ .11 $ — Issued — — — Expired — — — Converted to Common Stock Options — — — Balance at June 30, 2019 975,000 $ .11 $ — |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock Options | |
Stock Option | Stock option activity for the six months ended June 30, 2019, is summarized as follows: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Options outstanding at December 31, 2018 11,180,500 $ 0.20 7.02 Granted — — — Expired/forfeited — — — Options outstanding at June 30, 2019 11,180,500 $ 0.20 6.52 |
Convertible Notes Payable to _2
Convertible Notes Payable to Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Notes Payable to Related Parties | |
Schedule of long-term debt | Long-term debt at June 30, 2019 consisted of the following: 2019 Note payable to stockholders $ 300,000 Less: Unamortized debt issuance costs 21,004 Total long-term debt $ 278,996 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Going Concern Details Narrative | ||
Working capital deficit | $ 88,029 | $ (9,788) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Impairment losses | $ (69,178) | $ 0 | $ (69,178) | $ 0 |
Warrants | ||||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 975,000 | |||
Option | ||||
Antidilutive Excluded from Computation of Earnings Per Share, Amount | 11,180,500 |
Intellectual Property and Lic_2
Intellectual Property and License Agreement (Details Narrative) - USD ($) | Jun. 01, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Amortization expense | $ 7,374 | $ 7,374 | ||
Accumulated amortization of the intangible asset- intellectual property | $ 25,822 | |||
Impairment charge | $ 69,178 | $ 0 | ||
Helidyne LLC [Member] | ||||
Commercial royalty obligation | $ 100,000 | |||
Annual royalty | $ 50,000 |
Warrants (Details)
Warrants (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Warrants Abstract | |
Balance at beginning | shares | 975,000 |
Shares Issued | shares | |
Shares Expired | shares | |
Shares converted to Common Stock Options | shares | |
Balance at end | shares | 975,000 |
Weighted Average Exercise Price Balance at beginning | $ 0.11 |
Weighted Average Exercise Price shares Issued | |
Weighted Average Exercise Price shares Expired | |
Weighted Average Exercise Price shares converted to Common Stock Options | |
Weighted Average Exercise Price Balance at end | 0.11 |
Aggregate Intrinsic Value Balance at beginning | |
Aggregate Intrinsic Value shares Issued | |
Aggregate Intrinsic Value shares Expired | |
Aggregate Intrinsic Value shares Converted to Common Stock Options | $ | |
Aggregate Intrinsic Value Balance at end |
Stock Options (Details)
Stock Options (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Shares | |
Granted | |
Expired/forfeited | |
Employee Stock Option [Member] | |
Shares | |
Begining Balance | 11,180,500 |
Granted | |
Expired/forfeited | |
Ending Balance | 11,180,500 |
Weighted Average Exercise Price | |
Options Outstanding, Begining Balance, Weighted Average Exercise Price | $ / shares | $ 0.20 |
Granted | $ / shares | |
Expired/forfeited | $ / shares | |
Options Outstanding, Ending Balance, Weighted Average Exercise Price | $ / shares | $ 0.20 |
Weighted Average Remaining Contractual Life (Years) | |
Options outstanding Begining | 7 years 7 days |
Options outstanding Ending | 6 years 6 months 7 days |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 444,800 | $ 0 | $ 444,800 |
Unrecognized stock-based compensation | $ 0 |
Convertible Notes Payable to _3
Convertible Notes Payable to Related Parties (Details) - USD ($) | Jun. 30, 2019 | May 31, 2019 | Mar. 31, 2019 |
Notes Payable to Related Parties | |||
Note payable to stockholders | $ 300,000 | $ 10,000 | $ 290,000 |
Less: Unamortized debt issuance costs | 21,004 | ||
Total long-term debt | $ 278,996 |
Convertible Notes Payable to _4
Convertible Notes Payable to Related Parties (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | |
Royalty percentage | |||
Notes payable to stockholders | $ 290,000 | $ 300,000 | $ 10,000 |
Maturity date | Dec. 31, 2021 | ||
Interest rate | 10.00% | ||
Notes payable description | The notes are convertible into common stock at a price of $.20 per share through December 31, 2019, $.30 per share from January 1, 2020 through December 31, 2020, and $.40 per share from January 1, 2021 through the maturity date of December 31, 2021. |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 01, 2016 | Jun. 01, 2016 | Jun. 25, 2015 | |
Royalty percentage | 2.00% | ||||||
Company made payments | $ 38,750 | ||||||
Two monthly installments | $ 25,000 | ||||||
Revenue from product | $ 3,000 | $ 1,000 | $ 6,000 | $ 6,000 | |||
Helidyne LLC [Member] | |||||||
Royalty percentage | 3.00% | ||||||
Annual royalty | $ 50,000 | ||||||
Two monthly installments | 50,000 | ||||||
Committed to purchase price | $ 25,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transactions | ||||
Payments to related party | $ 9,300 | $ 7,600 | $ 18,913 | $ 18,330 |